Avoid making the common mistakes investors fall prey to when house flipping. Avoid buying the wrong house, not getting the right permits, and under-budgeting. Do not be caught unprepared and do not work with the wrong professionals or the wrong tools – unless you want to pay more for repairs.

Many investors who lose their shirts when flipping houses do so for entirely preventable reasons. In most cases, investors who run amuck do so because they make one of these mistakes:

1) They buy the wrong house. No matter what you do to a property on the inside or the outside, all the rehabbing in the world won’t help if the property is essentially not very attractive because of its location. Similarly, you won’t get the profit you deserve if you overpay for a property. Select carefully before you ever start thinking about the renovations you need to make.

2) They don’t get a permit for work. This can lead to expensive problems down the line, such as the city realizing you’ve had work done without a permit, and asking you to tear out the work completed.

3) Not creating a plan. If you don’t create a plan, you may realize only after the fact that the new titles you’ve laid have to be ripped up again in order to fix a faulty plumbing system. Figure out all the renovations you need to have done, and then figure out what needs to be done first. Then, work with a calendar to determine how long each repair will take.

4) Not having a realistic idea of costs. When flipping houses, you want to keep your renovation costs down, but the way to do that is not to underestimate your budget. Figure out how much your renovations will cost, and then triple that figure. That should live leave you with plenty of wiggle room.

5) Using the wrong schools or the wrong people. If you don’t know how to hang drywall, install a roof, or install a phone jack, hire someone else to do it. It sure beats shoddy workmanship or injury. Similarly, even if when you are working on a do-it-yourself project that you know how to tackle, don’t use a screwdriver when a hammer is required. Do things right or get out of the investment game.

6) Not planning for surprises. Once you’ve purchased a property, you may discover that you suddenly have a pest infestation, moisture problems, or bad wiring. Your contractor may be late or your supplier may take extra time getting materials to you. Pad your schedule and your budget so that when surprises happen they don’t cut into profits too deep.

7) Not getting a home inspection. Even if you think that you are a real estate expert, hire a licensed and accredited home inspector to take a look at the property. It could save you tens of thousands of dollars when you are flipping houses.

 

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